WASHINGTON Guarantee Mortgage Corp. has agreed to pay a $228,000 fine to the Consumer Financial Protection Bureau on allegations that it violated rules dealing with loan originator compensation.
The CFPB said Friday that Guarantee, of San Francisco, was paying its branch managers partly based on the interest rates of the loans they closed, which could influence their decision to place consumers in higher-cost loans. The mortgage bank is in the process of dissolving, the CFPB said, but it has agreed to pay a $228,000 civil penalty without confirming or denying the allegations.
"The compensation was funded by payments Guarantee made to marketing services entities owned in part by the company's branch managers and other Guarantee loan originators; the originator-owners drew a portion of those fees as compensation," the CFPB said in a press release. "As a result, branch managers received compensation based on the interest rates of the loans they originated in violation of the Loan Originator Compensation Rule during that period."
Guarantee had 10 branches in the San Francisco Bay area. Guarantee Mortgage Corp. is a defunct name but the company now goes by Guarantee Mortgage. The company's website says it has six branches.